AWB statement on governor’s education funding proposal

The Association of Washington Business, one of Washington state’s largest business associations representing small, medium and large employers, issued the following statement Tuesday from AWB President Kris Johnson regarding Gov. Jay Inslee’s proposed education funding plan:

“Washington lawmakers have made tremendous progress toward satisfying the requirements of the Supreme Court’s McCleary school funding decision, adding $4.5 billion in education funding since 2013, without a major tax increase.

“Unfortunately, by concluding that Washington families and employers should pay $4 billion-plus in new taxes during the next biennium (rising to more than $8 billion in the following biennium), Gov. Inslee discards the track record of bipartisan success that lawmakers have displayed in recent years, and threatens to undermine Washington’s already uneven economic recovery. Furthermore, the proposed tax increases do not ensure a greater return on the public’s investment.

“Washington employers appreciate the pressures on the state budget – and they share the goal of complying with the requirements of the McCleary decision – but any plan for funding education should also consider the impact it will have on Washington’s business competitiveness and the economy.

“The uneven economy has left many Washingtonians behind the booming Seattle job market. The tax proposals in the governor’s education plan would further erode the state’s ability to protect and preserve good-paying jobs.

• B&O: By expanding the B&O tax on services, this proposal would hit rural areas particularly hard, as service industries are among the few bright spots in many small towns.

• Carbon tax: The carbon tax proposal in the governor’s plan would be a second blow to the state’s manufacturers, a sector that supports good-paying family-wage jobs, but is already dealing with the impacts of the governor’s recently unveiled carbon rule.

• Capital gains: The governor’s proposed capital gains tax purports to target the wealthy, but we know from others states’ experience that it’s a volatile source of revenue and adopting one here would remove one of Washington’s competitive advantages.

• Incentives: The governor’s proposal to remove tax incentives is not new. Many of these ideas have been previously offered and rejected by lawmakers and the public. Taxing bottled water, out-of-state shoppers who support Washington businesses and auto trade-ins will hurt middle-class families and small businesses.

“The cumulative impact of these tax proposals — combined with other rising costs such as new water quality standards, a carbon rule on employers, increasing minimum wage and more — makes it difficult for businesses to compete in a global market.

“We appreciate that the governor stated his proposal is a starting point. We trust that other ideas will emerge during the legislative session that will ensure every student has access to a great education, and protect our ability to create jobs and opportunity for all Washingtonians.”